Oil rig supply workers eligible for BP moratorium relief fund for first time

A long-overlooked group of mostly Louisiana-based offshore workers will finally get their shot at some BP relief money in March.

Rusty Costanza / The Times-PicayuneCapt. Richard Garner of the Carol Chouest, a 280-foot-long, state-of-the-art supply vessel, would be one of those eligible for the first BP relief grants available to those who supplied and supported drilling rigs shuttered by last year's moratorium.

An estimated 9,000 workers who directly supplied or supported activity on the 30 deepwater rigs that were shuttered by the government's drilling moratorium were initially excluded from the claims and relief grant funds BP set up last summer.

These boat operators, shipyard workers who load supplies and fix equipment, workers that provide industrial chemicals and food for the rigs and diving and crew boat services will be able to apply, starting March 15, to an administrator for hardship grants of $3,000 to $30,000.

Offshore industry experts have long suspected that independent suppliers and rig-support vessel workers could be hurt more than anyone by President Barack Obama's drilling moratorium. But they were precisely the group left out of the BP oil spill claims process and from the initial relief money offered for workers hurt by the drilling ban.

BP set aside $20 billion to cover economic losses stemming from the oil spill in the Gulf of Mexico or the explosion of the Deepwater Horizon rig, as the oil giant and other responsible parties are required to pay by law. But there's no legal requirement for BP to pay for losses from Obama's moratorium. So, when BP agreed to create a Rig Worker Assistance Fund with $100 million, it was a donation. The oil giant tapped the Baton Rouge Area Foundation to administer the fund and initially limited it to employees who worked on the deepwater rigs.

But the rig worker fund paid out a lot less than originally anticipated. Most oil companies kept deepwater rigs under contract, and in turn rig owners kept their people employed through the five-month moratorium, meaning that the workers targeted by the BP donation were not suffering as much loss of income. The Gulf Coast Restoration & Protection Foundation, a nonprofit established to administer the rig worker fund, said more than $88 million of the $100 million is still available after grants were sent to applicants who worked on the rigs.

The foundation was expecting as many as 9,000 rig workers to apply and to spend all $100 million on financial hardship grants for them. But they got only 352 completed applications for the grants. So, only $5.3 million in grants went to 343 approved applicants, an average of just under $15,000 per recipient.

The foundation collected a $6.5 million fee from BP's $100 million fund, mostly to pay Covington-based First Premium Insurance Group to process the applications. That left $88.2 million for a second round, to expand the hardship grants to those who worked in direct support of the shuttered rigs.

Those who were working on May 6, 2010, in direct support of a deepwater drilling rig affected by the moratorium can file applications from March 15 to May 13, either online at www.RigReliefGrants.org or by calling 866.577.8141.

Unlike Feinberg's Gulf Coast Claims Facility, which compensates claimants for their spill-induced losses, the Gulf Coast Restoration & Protection Foundation is paying hardship grants, meaning the applicants must show that they can't pay certain expenses because of losses from the moratorium.

The Offshore Marine Services Association has contended since the moment Obama imposed the moratorium on May 30, 2010, that supply and support companies -- many Louisiana-based firms like Chouest, Hornbeck, Otto Candies and Bollinger Shipyards -- would be hurt more by the moratorium than even the rig companies.

The rigs could go idle and stay under contract while work continued on shoreside maintenance, but the companies that relied on multiple daily trips out to the rigs to deliver heavy machinery, drilling chemicals and tools, groceries and other items would see their business dry up, OMSA argued.

Indeed, last year when rig operators steadfastly held onto their employees, supply boat and tugboat crew members saw their hours cut and salaries slashed.

Sen. David Vitter, R-La., said he was happy the money is becoming available to moratorium victims, but the longer-term problem is getting those eligible for the aid back to work with new drilling permits for the deepwater rigs.

"We're eight-plus months out (from the May 30 moratorium) and there's still a shutdown of the Gulf, and I'm all for helping people who need it, but the real reaction we need is to restart drilling activity in the Gulf," Vitter said.

The moratorium was lifted in October, but the administration has not granted any deepwater permits because it says firms have not demonstrated that they can stifle future spills.